Formosa Bond could be opened to foreign issuers

OPEN ARMS The financial regulator is considering letting qualifying foreign firms make initial offerings of corporate bonds on the nation's offshore bourse

By Amber Chung / STAFF REPORTER

In a bid to promote the nation's fledgling offshore bond market, the Financial Supervisory Commission said yesterday that it planned to allow branches of qualified foreign financial institutions to issue bonds on the foreign-currency denominated bourse.

According to current practice, only headquarters of publicly traded overseas financial institutions are eligible to issue bonds on the offshore bonds exchange, named Formosa Bond.

The relaxation in regulations will, for example, allow Deutsche Bank's London branch to issue bonds on the offshore exchange, the commission said.

The financial regulator is also considering allowing subsidiaries of foreign firms listed on the 18 bourses worldwide that are partners to the Taiwan Stock Exchange -- including the New York Stock Exchange -- to make their initial offering of corporate bonds on Taiwan's offshore bourse.

HSBC Ltd said earlier this month that it planned to issue the offshore market's third batch of foreign currency-denominated bonds worth around NT$8.6 billion by the end of the second quarter.

Deutsche Bank is the first issuer with US$250 million in bonds, followed by BNP Paribas' maximum of A$500 million.